Large institutional investors will need to decide more quickly whether to opt out of securities class litigation to preserve their right to bring separate suits after a June 26 U.S. Supreme Court ruling, said attorneys who represent them (Calif. Pub. Emp. Ret. Sys. v. ANZ Sec. Inc., 2017 BL 218907, U.S., No. 16373, 6/26/17).

Defense lawyers, on the other hand, said the decision will bring much needed certainty to the securities class action process.

In a five to four decision, the high court held the California Public Employees’ Retirement System had waited too long to file its class lawsuit against the underwriters of more than $31 billion in Lehman Brothers’ debt offerings.

The justices determined that the filing of a class action doesn't stop the clock on a three year time limit set out in 1933 Securities Act Section 13, meaning that its longstanding tolling decision in American Pipe & Constr. Co. v. Utah is inapplicable.

The ruling “turned its back on” its own tolling precedent and practical, commonsense considerations and, in so doing, “has imposed hurdles on investors that are onerous, needless and in many cases insurmountable,” Washington lawyer Daniel S. Sommers, Cohen Milstein Sellers & Toll PLLC, told Bloomberg BNA.

Some investors will simply have their rights “extinguished in cases where their interests were previously protected, as they never will be able to navigate the path set by the Court today,” Sommers, who represents investors in class actions, said.